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UOP ACC 291 - PRINCIPLES OF ACCOUNTING II Week 4 - Cash Flow Multiple Choice Quiz

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Question;UOP ACC 291 - PRINCIPLES OF ACCOUNTING II Week 4 - Cash Flow;Multiple Choice Quiz;Week Four - Cash Flow Multiple Choice Quiz;1. Which of;the following is incorrect about the statement of cash flows?a. It is a fourth basic FINANCIAL;statement.b. It provides information;about cash receipts and cash payments of an entity during a period.c. It reconciles the ending cash account;balance to the balance per the bank statement.d. It provides information about the operating, INVESTING, and;financing activities of the business.2. Which;of the following will not be reported in the statement of cash flows?a. The net change in plant assets during;the year.b. Cash payments for;plant assets during the year.c. Cash;receipts from sales of plant assets during the year.d. How acquisitions of plant assets during the year were;financed.;3. The;statement of cash flows classifies cash receipts and cash payments by these;activities:a. operating and;nonoperating.b. INVESTING;financing, and operating.c. financing;operating, and nonoperating.d. investing;financing, and nonoperating.;4. Which is;an example of a cash flow from an operating activity?a. Payment of cash to lenders for interest.b. Receipt of cash from the sale of;capital STOCK.c. Payment of;cash dividends to the company?s stockholders.d. None;of the above.;5. Which is;an example of a cash flow from an investing activity?a. Receipt of cash from the issuance of bonds payable.b. Payment of cash to repurchase;outstanding capital STOCK.c. Receipt;of cash from the sale of equipment.d. Payment;of cash to suppliers for inventory.;6. Cash;dividends paid to stockholders are classified on the statement of cash flows;as:a. operating activities.b. investing activities.c. a combination of (a) and (b).d. financing activities.;7. Which is;an example of a cash flow from a financing activity?a. Receipt of cash from sale of land.b. Issuance of debt for cash.c. Purchase;of equipment for cash.d. None of;the above;8. Which of;the following is incorrect about the statement of cash flows?a. The direct method may be used to;report cash provided by operations.b. The;statement shows the cash provided (used) for three categories of activity.c. The operating section is the;last section of the statement.d. The;indirect method may be used to report cash provided by operations.Questions 9;through 11 apply only to the indirect method.9. Net;income is $132,000, accounts payable increased $10,000 during the year;inventory decreased $6,000 during the year, and accounts receivable increased;$12,000 during the year. Under the indirect method, what is net cash provided;by operating activities?a. $102,000.b. $112,000.c. $124,000.d. $136,000.;10. Items that;are added back to net income in determining cash provided by operating;activities under the indirect method do not include:a. depreciation expense.b. an;increase in inventory.c. amortization;expense.d. loss on sale of;equipment.;11. The;following data are available for Allen Clapp Corporation.? Net income $200,000? Depreciation expense 40,000? Dividends;paid 60,000? Gain on sale of land 10,000? Decrease in accounts receivable 20,000? Decrease in accounts payable;30,000Net cash provided by operating activities is:a. $160,000.b. $220,000.c. $240,000.d. $280,000.;12. The;following data are available for Orange Peels Corporation.? Sale of land $100,000? Sale of equipment 50,000? Issuance of common stock 70,000? Purchase of equipment 30,000? Payment of cash dividends;60,000Net cash provided by INVESTING activities is:a. $120,000.b. $130,000.c. $150,000.d. $190,000.;13. The;following data are available for Something Strange!? Increase in accounts payable $40,000? Increase in bonds payable 100,000? Sale of INVESTMENT 50,000? Issuance of common STOCK 60,000? Payment of cash dividends 30,000Net cash;provided by financing activities is:a. $90,000.b. $130,000.c. $160,000.d. $170,000.;14. The;statement of cash flows should not be used to evaluate an entity?s ability;to:a. earn net income.b. generate future cash flows.c. pay dividends.d. meet obligations.;15. Free cash;flow provides an indication of a company?s ability to:a. generate net income.b. generate;cash to pay dividends.c. generate;cash to INVEST in new capital expenditures.d. Both;(b) and (c).;16. In a;worksheet for the statement of cash flows, a decrease in accounts receivable is;entered in the reconciling columns as a credit to Accounts Receivable and a;debit in the:a. INVESTING;activities section.b. operating;activities section.c. financing;activities section.d. None of the;above.;17. In a;worksheet for the statement of cash flows, a worksheet entry that includes a;credit to accumulated depreciation will also include a:a. credit in the operating section;and a debit in another section.b. debit in;the operating section.c. debit in;the INVESTING section.d. debit;in the financing section.

 

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